The surprise Hamas militant attacks in Israel over the weekend that killed hundreds of Israelis and abducted others have raised concerns about disruptions and security risks for the country’s crucial high-tech sector.
Reuters reported on Oct. 9 that Israeli tech companies are expected to increase security measures and could face staffing issues as military reservists are called up, according to investors and analysts. High-tech industries account for 14 percent of Israeli jobs and almost a fifth of its GDP. Israel’s tech sector, which includes thousands of startups and R&D centers of big multinationals, has been a key driver of the country’s economic growth.
On Sunday, stock prices fell, and many businesses closed after Hamas gunmen rampaged through towns on Saturday. Militants also fired thousands of rockets into Israel, some reaching as far as Tel Aviv and prompting airlines to halt flights. Hamas is the Palestinian militant group that controls Gaza and has fought several conflicts with Israel over the years. However, this weekend’s coordinated and wide-ranging attacks across Israel were an unprecedented escalation.
Israel retaliated against Hamas with airstrikes in Gaza.
Hundreds have died in the conflict so far. Israel maintains a large military reserve force, and tech workers could be called up for active duty as the conflict continues. This could strain tech companies struggling to maintain operations with fewer staff.
Tech giants like Intel, Nvidia, and Microsoft have R&D facilities and other operations in Israel that could be impacted. Intel, Israel’s largest private employer and exporter, said it is monitoring the situation and taking steps to safeguard workers. Nvidia canceled an AI conference scheduled for next week in Tel Aviv due to safety concerns related to the attacks.
Some analysts say the conflict could eventually increase investment in Israeli tech and artificial intelligence companies tied to military spending on security systems. However, the sector was already facing a slowdown before the attacks due to internal political conflict and protests in Israel. In recent years, more Israeli startups have also incorporated in the US.
Analysts say Israel’s tech sector has bounced back after previous conflicts and expect it will recover again once the immediate security issues subside. But the scope of this weekend’s attacks could pose new challenges to the industry.
Featured Image Credit: Haley Black; Pexels; Thank you!
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